Policymakers, business leaders, and regulators assess shift from deterrence to values-based ethical business practice
Policymakers, business leaders, academics and regulators came together at Wolfson College last week to develop a new approach to the promotion of ethical business practice. The meeting, held on 4th May, was the latest in a series of Annual Conferences convened by FLJS Board Member Professor Christopher Hodges in association with the Centre for Socio-Legal Studies, entitled Ethical Business Practice and Ethical Business Regulation. It sought to demonstrate the benefits to businesses, consumers, and regulators of a new focus on fostering strong, ethics-based organizational cultures within businesses, rather than a ‘big stick’ deterrent approach to regulation.
Professor Hodges opened the conference to argue that fines and threats of imprisonment of those responsible for the financial crisis have failed to prevent repeat offending, given recent high-profile cases of rate rigging and misselling of PPI and other products by banks and others within the financial services sector.
He demonstrated that a business culture based on employee values can promote meaningful engagement within businesses, providing incentives to employees to improve the business as well as ensuring that consumers are treated more fairly. As a result, regulatory culture is already moving in the direct of promoting this kind of ethical culture within organizations rather than a ‘tick the box’ culture of regulatory compliance, or an adversarial fear-based culture between regulator and business.
Other speakers including Rob Brightwell, Programme Director of Regulatory Futures Implementation at Cabinet Office; Nick Malyshev, Head of the Regulatory Policy Division at the OECD; and Dr Florentin Blanc from the World Bank discussed various aspects of an ethics-based approach to business regulation, including the need for further research into the governance and harmonization of the multiple international standards of regulation that were emerging.
The conference builds on the ideas developed in a FLJS policy brief entitled Ethical Business Regulation (EBR), which was endorsed by the Cabinet Office, and aims to foster a business culture of mutual engagement, respect, and constant improvement, based on social trust.
A further policy brief detailing the findings of the conference is expected to be published later in the summer.